TMT Blog: Is it time for a divorce?

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Has anyone else noticed that there seems to be a high incident of marriage failure within the TMT world recently? We had eBay’s ‘Buy It Now’ proposition in announcing the plan to spin off PayPal back in October 2014 and more recently the signs that all is not well within the Microsoft / Nokia household. These snippets have made me consider: “What is it that drives management to do an about turn on a previous strategy?”.

It seems that all too often, bigger is just not better; corporate agendas become too wide, organisations become too complex and greater scale becomes a hindrance more than a help. The TMT sector more than any other demonstrates how a newer and more nimble challenger is always round the corner (think of WhatsApp destroying Viber or even Facebook replacing MySpace) – the more unwieldy a business becomes, the quicker it starts to lag behind the competition.

A really good TMT business concentrates on what it does best, making strategic – usually small – acquisitions along the way to stretch the boundaries just a little year on year. Most of Google’s deals are so small that they are completely off the radar, but every now and then you’ll notice something new on there that was the result of a great acquisition.